Corruption inquiry told of 'independent' report

The ICAC hears evidence that a so-called 'independent' report was in fact edited by former Minister Ian Macdonald's department.

A corruption inquiry has been told an "independent" report on a mining licence issued by former New South Wales Labor minister Ian Macdonald was in fact edited by his own department.

The director-general of the Primary Industries Department, Dr Richard Sheldrake, told the Independent Commission Against Corruption (ICAC) his portfolio included mining when the licence for the Doyles Creek mine in the Hunter Valley was awarded in 2008.

The ICAC alleges the licence was "gifted" to former union official John Maitland without a tender, and that his $165,000 investment in the project turned into a $15 million profit three years later.

The inquiry was shown notes that suggested a company doing an "independent" review of the licence asked for feedback from Ian Macdonald's department before giving the report to the Department of Premier and Cabinet.

Mr Sheldrake admitted changing a paragraph about the financial gain the state would get from the licence, but said he did not mean to be misleading.

He wrote that the licence would generate between $7.5 million to $15 million for the state, but did not include any extra money that could be generated if the mine was put out for competitive tender.

One report into the controversial licence found Mr Macdonald acted within his power in granting it, but another one then found that conflict of interest issues had not been properly dealt with.

When Mr Macdonald's barrister Tim Hale asked if he could cross examine Mr Sheldrake, Commissioner David Ipp said he could see no need to.

When Mr Hale argued the point, the Commissioner told him, "This is my inquiry, not your inquiry and not Mr Macdonald's."